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LEAD: Restaurant chain operator to get controlling stake in am/pm Japan.

TOKYO, July 9 Kyodo


Barbecue restaurant chain operator Reins International Inc. said Friday it will take convenience store operator am/pm Japan Co. under its wing by acquiring a 60-percent stake through a third-party share allotment scheme by the retailer.

Reins, which operates Gyukaku barbecue chains, is apparently trying to diversify its operations as its mainstay barbecue business has been struggling due to Japan's import ban on U.S. beef following the discovery of the first mad cow disease case in the United States at the end of last year.

Reins President Tomoyoshi Nishiyama said, ''We will do our utmost to foster the convenience business into our firm's core sector along with the food business.''

Tokyo-based am/pm Japan said it will raise 17.1 billion yen through new share issues to help bolster its earnings base and pull out of the state of negative net worth.

The convenience-store operator will learn store operation know-how and customer-serving expertise from Reins, which has grown rapidly based on a franchising method, company officials said.

''We want to make a fresh start'' by linking up with Reins, am/pm President Yukiatsu Akizawa said.

The share-allotment program will allow am/pm Japan to issue 570,000 common shares with an offer price of 30,000 yen per share and allot them to Reins, with the payment date set for around Aug. 10. It will give the restaurant chain, which is also based in Tokyo, a stake of 62.6 percent in the convenience store operator.

Capitalized at 1 billion yen, am/pm Japan had 1,420 convenience stores across the country as of the end of March. am/pm, the eighth largest convenience store operator in Japan, is currently a subsidiary of Nippon Mining Holdings Inc., which has a 90.0-percent equity stake in it.

Affected by intensifying competition, am/pm suffered a net loss of 3.5 billion yen in the year through March 31, which left it with a negative net worth of 2.5 billion yen.

am/pm said proceeds from the new share issues will help repay its borrowings as well as beefing up its capital base.

am/pm and Reins will jointly use distribution networks, the two companies said.

Reins International had capital of 3.56 billion yen as of the end of last December and 1,331 restaurants as of the end of June this year.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Jul 12, 2004
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